Crowe’s Fraud Pentagon Theory Review of Fraudulent Financial Statements with Audit Committee Moderation

This study aims to analyze the Pentagon fraud theory in detecting fraud in financial statements with the audit committee as a moderating variable. This study’s population is manufacturing companies listed on the Indonesia Stock Exchange in 2018-2020. The research sample is 198 consisting of 66 company annual reports for three years. The analysis technique used in this study is multiple linear regression and uses the MRA (Moderating Regresssion Analysis) method through IBM SPSS version 26 software. The result showed that the variables of pressure and arrogance had an influence on fraud in financial statements, while the variables of opportunities, rationalization and competence did not. Pressure and opprtunities variables have an effect on fraud in financial statements after being moderated by the audit committee variables, while the rationalization, competency and arrogance variables have no effect. Practical benefits for stakeholders as a source of information regarding factors that can be detected as a cause of fraud in financial statements. That is expected to avoid or minimize fraud and fraudulent financial statement, which can later develop and harm many parties, especially business people. The diffrence between this study and previous research lies in using variables, research periods and measurements that previous researchrs have not carried out.